Econintersect: The headline from Bloomberg reads “Singapore Miracle Dimming as Income Gap Widens Squeeze by the Rich.” The industrial and financial center city-state has been a model for economic development in the Far East for decades. The Bloomberg article (by Shamin Adam) suggests that government policy adjustments may be coming in Singapore to keep the enterprise flourishing. However, when a list of where Singapore stands in the economies of the world it has amazing strength.Here is a list of facts gleaned from the Bloomberg article about Singapore:
- More million dollar households per capita than any other country (U.S. $);
- The world’s second busiest container port;
- Fourth biggest financial center in the world;
- Has three of the six strongest banks in the world;
- The easiest place in the world to do business (The World Bank);
- Population 5 million;
- One-third of population non-Singaporean;
- Considered free of corruption;
- Top government officials have salaries over $1 million (U.S.), among the highest in the world;
- Second (to Macau) casino gambling center in the world.
A few days ago in an interview with Prof. Christopher Magee of MIT by Global Economic Intersection was published at GEI Analysis. Prof. Magee did not specifically discuss income distribution but did make some related observations:
I was aware that the birth rate for Singapore based citizens was falling (not as low as Korea) as in almost all developed countries. However, I had not seen overall population figures nor thought about economic growth despite population growth saturation. There could be several reasons. First, Singapore companies are hiring strongly outside of the country. (See Hiring Spree in Singapore.) Secondly, there are a number of people who are not full-time residents of Singapore who maintain apartments and sometimes even homes in Singapore. Singapore is a city-state and should be compared to similar political entities, like Hong Kong and Macao. I have no further insight into the political economy of Singapore, but it seems to be an attractive international city with the advantages of being a financial center, social and politically stable and having very attractive surroundings.
GEI publisher Steven Hansen formerly lived in Malaysia and has visited Singapore many times during the past decade. Some comments he provided for this news brief:
Yes, the rich are very powerful in Singapore. I read the Bloomberg article and agree with it. Singapore citizens continue to complain about a government which supports the rich and powerful. Is it worse than the USA in this regard? Likely so because it is more visible.
There are no slums. I have been over every inch of Singapore – even living in the industrial areas. You have never seen or witnessed a country like Singapore – there is no comparison anywhere in the world. What you may not know is that the majority of blue collar labor is imported and lives in government regulated camps. They are the same quality as the ones I operated on construction projects during my engineering career. Many workers live in conditions much better (and are fed better) than they would have been in their own country. The government sets the standards for feeding and living conditions and monitors. Ii have talked with these workers (remember I have lived in the industrial areas), and they were smiling and many had lived there for over 10 years. In short, workers were happy. I have lived in worse conditions when I pioneered a remote engineering project.
The Singapore miracle is not the rich – it is the massive size of the middle class. But put in perspective, I saw the same conditions in Iran before it fell – and that did not stop a few from uprising. Although Singapore is not Iran, it does give concern that you cannot allow any class to become too powerful.
Ownership of major corporations by the Singapore government is a strength, although the embedded capitalistic model is strong, and very successful. Singapore is a corporation – and it thinks in terms of profit and loss. In some respects the current Chinese economic model is based on Singapore.
Sources: Bloomberg and GEI Analysis.
Editor’s notes: Sanjeev Kulkarni provided the tip to the Bloomberg article. This article was written by GEI Managing Editor John Lounsbury.
